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Rory Thomson, a senior associate in the Insurance and Reinsurance Group at CMS, previews the appeal pending in the case of Edwards v Hugh James Ford Simey (a firm). The case concerns the correct approach to the assessment of damages in a claim for loss of chance arising from solicitors’ negligence, and the extent to which a court should admit evidence obtained after the date of settlement of the original claim as part of that assessment. The appeal was heard by the UK Supreme Court on 25 July 2019, and its judgment is currently awaited.

Background to the appeal 

The appellant is the daughter of Thomas Watkins, a former miner who died in 2014. The appellant pursues the claim on behalf of her father’s estate.

Mr Watkins developed a condition known as vibration white finger (VWF) as a result of his employment as a miner by the National Coal Board. In 1999, Mr Watkins instructed the respondent firm of solicitors to make a claim under a compensation scheme set up by the Department for Trade and Industry. The scheme provided standardised, tariff-based compensation to former miners suffering from VWF.

In 2000, Mr Watkins had a medical examination and was assessed as having a level of VWF that, under the scheme, entitled him to a general damages award of £9,478. That assessment also created a rebuttable presumption that he required assistance with various tasks and that, as a result, he might be entitled to additional compensation by way of a ‘services claim’.

However, in 2003, Mr Watkins, relying on the respondent’s advice, accepted an offer to settle his claim for only the general damages award of £9,478. His acceptance of that offer terminated his services claim.

In 2010, Mr Watkins issued a claim against the respondent alleging that its advice was negligent and that, as a result, he lost the opportunity to bring a services claim.

In 2013, for the purpose of his claim against the respondent, Mr Watkins was examined by another medical expert. He was assessed as having a significantly lower level of suffering than he was assessed to have had in 2000. Had he been assessed to have that level of suffering in 2000, he would have been entitled to a general damages award of only £1,790 under the scheme, and he would not have been entitled to make a services claim.

At first instance, the Recorder concluded that the respondent’s advice to Mr Watkins was negligent. However, the Recorder found that Mr Watkins’ chose in action had no value. That is because Mr Watkins had already been paid a greater amount of damages than that to which, according to the 2013 medical assessment, he was entitled under the scheme. The Recorder therefore dismissed the claim.

The appellant appealed to the Court of Appeal. The Court of Appeal quashed the decision of the Recorder, remitting the case for a rehearing.

The Court of Appeal began its analysis from the principle that those who have suffered losses from professional negligence are entitled, so far as possible, to be put back in the position in which they would have been, absent the negligence (the principle of full compensation or ‘restitutio in integrum’). A court therefore has to establish what loss and damage was caused by the negligence. Where negligence by lawyers has prevented a claim being brought, or caused the claim wrongly to be abandoned or lost, or has led to an under-settlement, then the measure of loss is the difference between what the claimant actually got by way of compensation (whether zero, or something) and the amount that they would have got, absent the negligence.

Sometimes examination of the original claim will demonstrate that the lost claim was completely hopeless, in which case the professional negligence claim is worthless. Sometimes the lost claim would have been unanswerable, in which case the full value of the original claim should be recovered. In many cases, the value of the original lost claim cannot be assessed as hopeless or cast-iron, and the court must assess a percentage prospect of success as applied to what would have been recovered if the original claim had been recovered in full. In all three cases, the assessment is of the value of the lost claim, not a trial of the original cause at the time of the negligence claim. That is true of the worthless case and the cast-iron case as much as it is true of cases with less certain outcomes.

In every such case, the court is seeking to establish what was lost by the claimant, as at the date, often the notional date, of the original trial or settlement. What the claimant should recover in the professional negligence claim is not established by answering the question: how much of the original claim can they prove now? Rather, it is established by answering the question: what was the value of what they lost then?

The Court of Appeal held that, save in exceptional cases, these principles apply even where relevant after-coming evidence arises. It is not the case that all available after-coming evidence falls to be assessed in every case, or that on any professional negligence claim the court simply approaches the strength of the case as at the date of the professional negligence trial, asking the claimant what they can now prove, on the basis of expert evidence which would not have been in existence had the original matter proceeded with competent representation.

However, there are limits to the principle of full compensation. For example, a court will not apply it where the original claim, or part of it, was based on fraud.

More difficult cases are those rare ones in which a key element of an award of damages would have been based on a prediction that has unexpectedly been proved wrong (the Court of Appeal referred, by way of example, to the case of Whitehead v Searle [2008] EWCA Civ 1093, in which a claim for damages for under-settlement was pursued on the basis that a carer would have been awarded the cost of care for many years, yet the carer concerned died before the claim was set down for trial).

The Court of Appeal accepted that there is no established threshold over which a party must step before such an after-coming event, which could not and would not have been known, should alter the outcome. But it said that, if this is a matter essentially of public policy, so that a court is forced to recognise that the ordinary principles “would not do justice between the parties”, then there must be a requirement for a significant or serious scale to the consequences of the supervening event before it should be permitted to establish an exception to the normal principle of full compensation. Unless there is some such threshold, there will be a continuing pressure to admit fresh evidence which would not have been available at the original notional trial, on all aspects of such cases, dependent on the energy and resources of the parties to the professional negligence action and their insurers. In practice that will undermine the rule of full compensation.

In the present case, the after-coming evidence (i.e. the 2013 medical assessment) would not have been available at the notional date of settlement of the claim under the scheme. In the Court of Appeal’s view, neither the certainty nor the scale of this after-coming evidence could possibly bring the case into the exceptional category where evidence which would never have been available at the original claim should have diverted the Recorder from assessing the value of the original claim. The Recorder should have instead decided what were the prospects of the claim, as it would have been progressed, assessed the value of the lost claim, and made an award accordingly.

Comment

In Edwards, the Court of Appeal has reasserted the high threshold for permitting after-coming evidence to limit the principle of full compensation. Only in rare or unusual cases – those where there is “a significant or serious scale to the consequences of the supervening event” – will such limitations apply.

There is perhaps still doubt as to what is required to pass the threshold. The judgment of the Supreme Court – which heard the appeal on 25 July 2019 – may provide further clarification, or indeed a different ruling, and is therefore awaited with interest.